TotalBalance and Primary Balance 1998 1999 2000 2001 2(h2 2003 2004 2005 '+PrimaryBalance *NGBalance Figure 3 shows wide fluctuations in both the total balance and the primary balance. There was a sharp fall in the primary balance between 1994 and 2002. This was mainly due to declining revenue during this period. The primary balance recovered in the period 2003-2007 as the government held back on spending while revenues improved. lt fell in 2008-2010 due to deteriorating revenues following the global recession. 2011 saw an upturn in the primary balance on account of cutbacks in spending and a slight uptick in revenue. The total balance of the national government shows broadly similar movement as the primary balance, the difference in levels being due to interest payments. Public debt Figure 4 shows improving debt ratios since 2004 to 2011. After peaking at 74.4o/o of GDP in 2004, total government debt as a percentage of GDP has gone down to 50.9% in 2011. Both the domestic and external debt stocks fell during the period 2004-2011, with the domestic debt falting by 10 percentage points and the external debt declining by 14 percentage points. The decline in the external debt stock reflects falling world interest rates, easing risk premium for Philippine debt, and sustained current account surplus. The current account surplus signifies reduced need for new foreign loans. 5